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Walker says Alaska is in the ‘gravest fiscal crisis in state history’

In State of the State address, Walker again urges action on deficit

MICHAEL PENN | JUNEAU EMPIRE Gov. Bill Walker shakes hands with legislators as he enters the House chamber for his State of the State address before a joint session of the Alaska Legislature at the Capitol on Wednesday. Senate President Pete Kelly, R-Fairbanks, left, and Speaker of the House Bryce Edgmon, D-Dillingham, watch from the Speakers desk in the background.

MICHAEL PENN | JUNEAU EMPIRE Gov. Bill Walker speaks during his State of the State address before a joint session of the Alaska Legislature at the Capitol on Wednesday. Senate President Pete Kelly, R-Fairbanks, left, and Speaker of the House Bryce Edgmon, D-Dillingham, watch from the Speakers desk in the background.

Speaking to the Alaska Legislature Wednesday night, Gov. Bill Walker referenced the words of the director of the Legislative Finance Division and called the state’s current budget trouble the “gravest fiscal crisis in state history.”

“Mr. Teal was right” when he used those words, Walker said.

“Better days will come, but until then, we must make difficult adjustments,” he said.

Walker said the Legislature has already cut the state’s budget to levels last reached in 2007. He used his address, the annual speech to the Legislature, to call for new revenue to close the deficit.

“We can’t continue to cut the budget and expect to improve the situation,” he said.

Walker’s draft budget, now in the hands of the Legislature, calls for spending some of the investment earnings of the Alaska Permanent Fund to reduce (but not entirely eliminate) the deficit.

He said Wednesday that he will reintroduce a plan that passed the Senate (but failed in the House) as Senate Bill 128 last year.

In 2016, Walker’s “pulling together” State of the State speech referenced a picture given to him by Lt. Gov. Byron Mallott. The picture was of a group of Metlakatla residents in the 1900s pulling stumps. They all stood around a single rope, pulling the stumps with pure muscle power.

“We have been pulling together. And I know we can get through anything if we all pull together as Alaskans,” he said.

Walker asked the Legislature at that time to fill the deficit with a comprehensive fiscal plan he drafted. Despite an extended regular session and multiple special sessions, they did not.

On Wednesday night, Walker urged lawmakers to propose alternatives if they don’t like what he’s offering.

“If you don’t support the plan I have proposed, then put another plan on the table,” he said. “If you believe we need to cut more, identify your cuts, and put them on the table. If you think the solution is a different kind of tax than I have proposed, put your tax proposal on the table.”

In his first State of the State address, delivered in 2015, Walker refused to call the state’s fiscal situation a crisis.

“Some might call this a crisis. I call this a challenge and an opportunity,” he said at the time.

He returned to the topic again in 2016 and again refused to call it a crisis. This time was different.

“Last year I said it is only a crisis if we don’t act,” Walker said Wednesday night. “We didn’t. Now we have a crisis on our hands.”

“We are at that point (of crisis),” agreed Rep. Sam Kito III, D-Juneau, following the speech.

Kito said Alaska is in the same position it was when Walker last delivered a State of the State address — except the state now has $3 billion less in savings.

“I appreciate the governor’s insistence upon a fiscal plan,” said Rep. Justin Parish, D-Juneau, following the speech. “I’m glad that he’s calling upon both bodies to present something, and I think that the people of Alaska deserve no less.”

Parish said Alaskans have already sacrificed — through roads going unplowed, highways unpatrolled by police, and fewer beds available at Alaska Pioneer homes.

“People are sacrificing, and we need to act,” he said.

Sen. Dennis Egan, D-Juneau, was pessimistic following the speech.

“I’m worried about my community,” he said.

The Alaska Senate’s Republican-led majority is calling for $750 million in cuts to the state budget over the next three years.

“There’s a lot of issues we have to discuss about public employees. A big percentage of my constituents are some way or another public employees, and it’s up to me to protect them,” Egan said.

By the numbers

Walker’s 6,600-word address, delivered by teleprompter, was 400 words longer than his 2016 speech and more than 1,600 longer than his 2015 address.

It took Walker 46 minutes to finish the oration, which was longer by word count than every presidential inauguration speech but one. It was near the average speaking length of presidential State of the Union speeches since 1966.